How to take advantage of a trading opportunity

Personal Finance & Money Asked on January 6, 2022

You hear or read something that makes you know 100% that a CFD market price or Stock Price of company X is going to go up or down …there is no denying it …(as a noob at trading) i wait until the second the market opens ..waiting excitedly to make some money ..the second the market opens i try to make a trade ..but before iv even realised the price has already gone to its next position ..of where i was trying to take advantage of it.

Is there any tricks of the trade ( no pun intended) that can be used to take advantage and actually make money in that literal 1 second window when the market opens

3 Answers

Note that you are probably falling for a common scam anyway. The 'secret information' doesn't exist, but by publishing the predicted increase in some forumor whatever, many people (like you) try to buy the stock, which leads to it really going up.
Of course, that leads to people believing even more that this guy does good predictions - the classic self-fulfilling prophecy.

In reality, that guy has bought that stock days before, and sells it for those increased prices, making money on all the people that believed him.
That is of course illegal, but for small enough fish, they get away with it, as it is difficult to find and prove, and the SEC has normally bigger fish to fry.

Answered by Aganju on January 6, 2022

Your problem is that the professionals have faster access to the markets than you do. They have high-speed low-latency direct links to the stock exchanges, and they have computers ready to trade at a moments notice.

If you get in within a second of the market opening, they will already have done the trade within a millisecond.

Answered by Simon B on January 6, 2022

"He who hesitates is lost." Or perhaps he just misses the trade.

Trading a stock whose price moving quickly due to news is very difficult because it's like someone yelled fire in a crowded room. Everyone is running for the door in order to get in or out. How you go about it depends on whether you're trading the pre-market (low liquidity) or regular hours. Here are some generic suggestions:

  • Lead price by offering to pay a little bit more than the current price, giving yourself a small amount of buffer so that if the stock's price rises a little bit in the fraction of a second that it takes to submit your order, you still have a better chance to get a fill.

  • Open a sell ticket as soon as you decide to attempt to buy the stock. Fill in everything that you can so that you are reducing the time that it will take to submit a sell order if your buy order gets filled.

  • If you are taking multiple positions, for instance averaging up as price rises, make sure to have a pre-prepared spreadsheet which will perform various calculations that keep you informed (such as average cost). Time is money and you want to know where you stand at all times, particularly if you are scaling in and/or scaling out.

  • Make sure that you practice disciplined risk management. Time is money when trading. You have to be decisive and if you hesitate, you'll be the deer in the headlights as money is sucked out of your account.

  • Before attempting this, spend some time paper trading. It's not emotionally the same as when real money is on the line but at least it will hone your reflexes.

What you are attempting to do is very, very difficult. Very, very few people succeed at it.

Answered by Bob Baerker on January 6, 2022

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